The demo went smoothly, and we came to the last slide. I asked, “Are there any questions?” After a long pause, a skeptical voice asked:
"Yea, looks great. But can it SCALE?”
Whether it’s a founder looking for investors, or an innovative leader looking for funding inside their own company for a new program or product, the question is often the same:
“How can this big idea to change the world actually SCALE?”
In my work with CEOs and boards driving new high-stakes strategies, scaling their big idea is often the goal.
What IS scaling, anyway? And why does scaling your Kingdom business matter?
I’m going to be speaking about scaling at the Nehemiah Best Practices Conference in Orlando on March 30, 2023. Entrepreneurs from all over the world come together to share learnings and avoid common mistakes. Scaling is top of mind.
Scaling your Kingdom Business
In an informal poll I ran this week, the majority of people I asked to define what it means to “SCALE” responded with the word “GROWTH”.
Growth can be a juggling act.
Even when you have an offering that people want, there are challenges:
- You end up with too much demand that you aren’t ready for, and you can’t fulfill orders. Or the demand is lumpy, and you have too much inventory and staff is sitting on their thumbs.
- When demand hits, you don’t have enough people to do the work. So everyone works overtime to meet commitments and ends up burning
- Or you quickly hire people so you can grow, but you find out some of them were the wrong people for the job, and you now have personnel problems to deal with.
- You grow by expanding into new markets, but those customers want something a little different. So you create new versions of your offering for each market, and now you’ve got more complexity. Or you tweak your offering a little, and your original customers are unhappy.
- You’re growing faster than your reserves, and cash flow problems mean you’re juggling bills, and suppliers are angry. Or you have identified exactly the resources you need to grow, but you don’t have access to capital to secure them.
Yes, even when you’re past the risky Start-Up Stage, growth can be EXCITING – but stressful!
However, GROWTH and SCALING are DIFFERENT.
- Growth means INCREASING impact: more customers, more revenue, and more market share.
- On the other hand, SCALING takes growth up a notch.
Scaling means you increase customers, revenue, and market share – but you do it WITHOUT increasing your costs and resources at the same pace!
Scaling is the ability to deliver a quality offering while handling more workload, without having to spend a lot more money for resources and people to handle that workload.
Mastering Small Businesses
WHY DOES SCALING MATTER?
Scaling is a STRATEGIC approach to drive impact, create profit and sustain a healthy organization over time. By scaling, we can create more VALUE.
According to a study by management consulting firm McKinsey, “While most companies tend to focus on launching new businesses, the real value comes from being able to SCALE them up. Based on an analysis of U.S. venture-capital data, two-thirds of value is created when a company scales up to penetrate a significant portion of the target market.”
SO HOW DO WE SCALE?
Scaling requires we have a big VISION and that we take action early to be ready for the implications of that vision.
Scaling requires that we challenge ourselves to think “WHAT IF?” right from the start!
Whether they are Harvard Business School professors who’ve done the research or CEOs who’ve actually scaled organizations themselves, experts tell us that to scale, we need to put a plan across four dimensions: Purpose, Product, Process, and People.
This is not a new idea.
Thousands of years ago, God advised the Israelites and their leader Moses to be ready for growth as a nation, even while they were wandering around in the desert. “‘Enlarge the place of your tent; Stretch your tent curtains wide. Do not look back.…’” (Isaiah 54: 2) And when Moses was getting burned out with the responsibility of being the leader and realized he couldn’t do everything himself, he tapped the expertise of wise and capable leaders to help him make decisions.
In the 1700s, George Washington led the American revolutionary forces to victory despite horrible conditions. Though resources were meager, he organized a process to get food and supplies to different fronts so they could survive the freezing winter. He tapped Alexander Hamilton as his right hand during the war to help him get day-to-day decisions made more quickly. When he became President, the vision he and the country’s founders framed for an independent democracy instead of a monarchy led Washington to plan for his own successor right from the start.
If Moses and George Washington were on our Advisory Board today, what would they guide us about scaling?
I think they’d encourage us to FOCUS:
- PURPOSE: Be very clear on your mission (your WHY), and don’t get so darn attached to the HOW. The world changes quickly, and you’ll need to adapt how you get things done.
- PRODUCT: Focus on bringing real value. Don’t fall in love with your offering (your WHAT). Keep listening to your customers. Evolve your offerings based on their feedback.
- PROCESS: Get ready for anything. Talk about “WHAT IF?” regularly. Put systems and processes in place that can adapt. Use online tools and cloud infrastructure, and artificial intelligence so you can add customers and transactions more easily. (Don’t you think Moses and George would be the first to experiment with how to apply ChatGPT to get things done faster?)
- PEOPLE: Build a strong leadership team and empower them to make decisions right from the start. Build a trusted diverse ecosystem of partners to tap their expertise and capacity. You cannot scale by yourself.
It’s the PEOPLE angle of scaling that I find most fascinating.
Scaling sounds GREAT when you’re talking about software. One line of code can support one customer or one transaction. And that same line of code can support thousands and millions!
But how do you scale PEOPLE? At the Nehemiah Best Practices Conference, I’m going to be talking about three considerations for scaling when it comes to people – and cloning isn’t one of them!
Join me in Orlando on March 30, 2023, and let’s talk about it!
For more great articles that provide you with insights to help you with your entrepreneurship journey from discovery to succession, click HERE to view our library of Kingdom Business Resources.
Interested to know more about upcoming events and educational opportunities offered by the Nehemiah Entrepreneurship Community? Click HERE!